Encana Corp (ECA.TO)

Given the change at the top and that they need to do more joint ventures and that natural gas will recover, if you are happy receiving 4% then you should continue to hold.

A name you can wait on. Natural gas right now is trading at a reasonable level on weather. 5-year supplies are at about 11% above the 5-year average. Until LNG comes out, dry gas can be a pretty tough place to be. Have announced big CapX, fully conditional on higher gas prices. Balance sheet isn’t bad at about 1.8X.

Clearly a “go to” stock. Had a lot of changes recently, essentially with the CEO taking early retirement. Need someone to come in, preferably from the outside, and establish a strong strategic religion that everyone understands and can see. One that doesn’t change and one they can live with and that realizes gas prices are not going to be significantly higher. He just sees them as a land bank rather than a fully functional firing-on-all-cylinders energy company.

You have to look at natural gas stocks measured in decades. He is building a natural gas portfolio for his clients. We are at the bottom of the range for the 5 year picture and near it for the 10. Thinks we are making a bottom. Don’t look to dump. It could double in the next 5 to 10 years. Short term trading is a whole different thing.

At some point, the natural gas market is going to pick up because of demand in the US. The cost of drilling wells in the US is going up. The demand for natural gas as they convert big trucks and coal, etc. is going to pay off. This could be a two-year bet. 4.08% dividend is sustainable.

Nat gas bottomed last summer. We have a bottom here. It is set for a multi-year run.

With this one you are being a contrarian on gas prices. It is going to come back and is a safe name. It is not extremely cheap, though. He is looking for names with solid balance sheets.

Very cheap at 4-5 times cash flow. One of the problems is that the government is looking at the Chinese taking an interest but he doesn’t think this is a problem because it is only a 49% interest. Looking at a brand-new prospect in the Duvernay. Could be interesting.

Doesn’t interest him. Stock price is way too high for him. It is rare for him to buy stocks over $10. Thinks the government is making major mistakes in selling off companies.

Encana (ECA-T) or Canadian Natural Resources (CNQ-T)? Go for Encana. It is much better. 200 day moving average is flat and the stock is starting to flirt with it and probably going to break out. Downside risk is about $1 and the upside is to about $30. On CNQ the problem is you still have a falling 200 day moving average.

There seems to be rumours of great dissension in the ranks of this company because of the failure to come up with a joint venture partner. There is some suggestion at the board level that they might consider selling the company. If you own, continue holding on a spec that it will go higher based on natural gas prices or someone will take a run at it.

A large North American Gas producer. Concerned that it looks like there is a flat production profile now and going into next year. They probably have to sell some assets to be able to invest in growth opportunities. This is a risk to the story. Wait for $5 gas. The dividend is safe but there is no growth.

(Top Pick Jan 27/12, Up 10.42%) Nat gas is going through a bullish transition. Asset managers will rush into this name.

(Top Pick Jan 27/12, Up 10.42%) Nat gas is going through a bullish transition. Asset managers will rush into this name. It has stopped going down and has turned up. It is a rounded base. We sold off and are into support and it is moving higher. Money managers and institutions will want to go here.

Nat gas has had a nice bounce and she thinks the trend is upwards but it won’t go much above $5 short term. She has chosen companies that pay a higher dividend while you wait. Potentially it is a name she would add in the spring to her watch list.